Dollar struggles to retain gains, option expiries bump yen up

hl.co.uk:

We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Newsroom

Newsroom articles are published by leading news agencies. Hargreaves Lansdown is not responsible for an article's content and its accuracy. We may not share the views of the author.

HL Podcast

HL Insight

The U.S. dollar struggled to keep gains on Monday as looming central bank decisions in Japan and Europe and vacillating market expectations for Fed rate cuts forced a pause in its data-spurred rally late last week.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

22 Jan 2024

Japan's yen was the notable mover in otherwise quiet trading, as it tiptoed away from Friday's one-month low of 148.80 to as high as 147.74. The currency has been the worst hit against the dollar this year, tumbling about 5% in a swift reversal of December's bounce to five-month peaks near 140.

The Bank of Japan's two-day meeting begins on Monday. Wagers for an exit from negative rates at this meeting have been wound down in the wake of the New Year's Day earthquake on Japan's west coast alongside dovish BOJ commentary.

Traders said one factor driving the yen higher was the expiry of a large amount of currency options this week and the hedging around those contracts.

LSEG data showed that while most options expiring between Monday and Thursday with strike prices between 147.15 and 148.10 dollar-yen levels were small, the cumulative